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PDX Concessions Program Update 2016 Request for Proposals (RFP) Results

Wednesday, January 20, 2016

Shane Andreasen – Senior Manager, Concessions Development

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Award Winning Airport & Concessions Program • JD Power

– Best Large Airport in North America - 2015

• Travel & Leisure – Best Overall US Airport – 2013, 2014 & 2015 – Airports Council International

• Airports Council International – Best ‘Green’ Concessions Practice or Concept – 2013

• Conde Nast Traveler – Best U.S. Airport – 2006, 2007, 2008, & 2010

• Airport Revenue News – Best Concessions Management Team – 2001, 2002, 2012 – Airport With The Best Overall Program – 2001, 2002 – Airport With The Most Innovative Services – 2003, 2004 – Airport With The Best Redeveloped Program – 2002 – Airport With The Best Concessions Program Design – 2002, 2003, 2004 – Airport With The Best Concessions Customer Service – 2008

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PDX Concessions Program

• Why are Concessions Important – Serve our Customers – Keep Airline Costs Competitive – Provides Employment and Business Opportunities for the

Community

• The PDX Model is Unique – Direct Leasing Model – True Street Pricing – Local Brands

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Sales Per Enplaned Passenger Up 113% from $5.80 to $12.37

Concessions Program Performance

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Opportunity

• Lease Expirations & Overall View of Program

• 75% of Program Expiring

• Three Phases

– Phase I (2014)

– Phase II (2015/2016)

– Phase III (2017/2018)

• Goals

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Specialty Coffee

• Expand Offering to Meet Demand

– 10 Locations to 12 Locations

• Provide More Variety of Brands

– 2 Brands to 4 Brands

• Expand Local/Regional Brand Presence

• 4 Coffee Packages of 3 Locations Each

– All Brands on Both North and South Sides of Airport

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Phase II Lease Expirations

Concourse A Starbucks

Concourse B Coffee People

South Lobby & Concourse C Starbucks SL Soundbalance Made in Oregon Starbucks C-East Sandoval’s Tequila Grill Coffee People

Concourse D Starbucks Made in Oregon

North Lobby & Concourse E Coffee People NL Coffee People E

Oregon Market Coffee People

Bag Claim Starbucks

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Phase II Locations

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Solicitation Process

• Outreach & PDX Informational Meeting

• Request for Qualifications (RFQ) Issued

• Request for Proposals (RFP) Issued

• Proposal Reviews

• Selection Committee Recommendation

• Commission Approval

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RFP Results

• 37 Proposals

– Mix of Local, Regional & National Businesses

– Existing and New Concessionaires

• Some Locations in RFP Will Not Be Awarded

– Future Opportunities

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Selection Committee Review • 7 Committee Members

– Port Employees & External Business Partners • Evaluation Criteria

Category Weight PDX Quality Employer Plan 25% Proposed Concept, Menu/Product, Street Pricing & Customer Service Plan 20%

Business Plan, Sustainable Practices & Quality Control 15%

Concept, Design and Execution 15% Financial Statement/Capability & Pro-forma 15%

Airport Disadvantaged Business Enterprise Program Participation 10%

Total 100%

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PDX Quality Employer Plans • PDX Workplace Initiative Principles

– Commission Adopted April 2015 • RFP Criteria – PDX Quality Employer Plan

Employee Relations – Pay & Benefits – Training – Advancement – Safety 25% Weighting

• Required Employee-Employer Relationships Plan

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PDX Employee Impact

Assumptions Coffee – 15 employees/location Retail – 15 employees/location F&B – 30 employees/location Gourmet Markets – 40 employees/location

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PDX Job Pathways

• PDX Jobs Board

• PDX Labor Pool

– $1,000 Incentive

• Transition Meeting (April)

• PDX Job Fair (May)

• PDX Jobs Office in PDX Conference Center

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Next Steps

• Design Review & Permitting

• Transition Meeting & PDX Employee Job Fair (April/May)

• Existing Concessions Close (June 30, 2016)

• Awarded Location Openings

– New Locations (July 1, 2016) – Redeveloped Locations (October 1, 2016) – Concourse E Extension Coffee Locations (January 2018) – Concourse B Coffee Location (TBD)

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Discussion/Questions